TennCare expansion

The Affordable Care Act, or Obamacare, initially required states to offer Medicaid coverage to anyone making less than 138 percent of the federal poverty level, starting Jan. 1. The U.S. Supreme Court struck down that requirement in its 2012 decision that otherwise upheld the law.

That gave states the option of deciding whether to expand. According to the Kaiser Family Foundation, 25 states will expand Medicaid and 25 will not.

In Tennessee, about 175,000 more people would be eligible for Medicaid if it were expanded. More than 90 percent of the cost of their care would be covered by the federal government.

Otherwise, hospitals say they will be forced to pay for it through their charitable care programs.

Excerpt of Gov. Haslam’s letter to Secretary Sebelius

“We recognize and are very concerned about the implementation failures of the Affordable Care Act and the law’s overall impact on consumers, providers, the health insurance marketplace and the state and federal budgets. We do not see a path forward in the current environment that will allow us to extend coverage to theMedicaid Expansion population until the aforementioned issues have been resolved and flexibility is given to allow us to address health outcomes and cost in a way that the traditional program does not.”

Gov. Bill Haslam has written federal officials a letter laying out what he thinks is needed to expand Medicaid in the state, following almost nine months of talks but no concrete progress.

Haslam announced Monday that his office would send a letter to Health and Human Services Secretary Kathleen Sebelius describing the status of his “Tennessee plan” to offer Medicaid to more of the poor in Tennessee.

The update came as part of a lunchtime speech to the Nashville Rotary Club that otherwise focused on what he sees as the accomplishments of his first term. In what is likely to be his last speech to the influential Nashville business group before his 2014 re-election campaign, Haslam cast himself as a reformer who has shaken up education and government services.

Haslam’s office released the two-page letter Monday afternoon. It recaps discussions between Tennessee and federal officials and points out some sticking points in negotiations but offers no new suggestions.

“I hope the outcome of this is for HHS to say, ‘OK, let us sit down and have serious conversations with you about how we do move forward on that,’ ” Haslam told reporters. “We’ve been having those conversations, but I think our point is, let’s put it on paper.”

Haslam, a Republican, said in March that he would delay a decision on expansion of the state’s Medicaid program, TennCare, in the hope that the federal government would agree to let Tennessee offer coverage modeled on private health insurance.

As governors throughout the country have announced their decisions on Medicaid expansion — and several have had their proposals approved — Haslam has been criticized for not taking action.

TennCare covers about 1.2 million residents in the state, but the program leaves out many working-poor adults. The Affordable Care Act calls on Tennessee to offer Medicaid to about 175,000 more people and includes a guarantee that the federal government will cover 90 percent of the cost or more until at least 2020.

The Tennessee Hospital Association estimates that the federal government would send Tennessee $6.4 billion in the first five and a half years of expansion, while obligating the state to spend only $199 million.

Hospitals have pushed for expansion, arguing that it would take some of the financial burden off treating the uninsured. They have predicted a wave of service cuts, particularly in rural Tennessee, unless TennCare is expanded.

But many Tennessee Republicans say expansion poses a potentially costly burden on the state, noting that Democratic Gov. Phil Bredesen’s administration culled the rolls of TennCare to keep it from overwhelming the state budget. They have pressured Haslam not to expand TennCare, and the governor has said he will not present a plan unless he is confident he can get it through the state legislature.

Haslam has said since the spring that he has been trying to work out a compromise. But during an appearance in Memphis last month, Sebelius confirmed that Tennessee had not presented the federal government with a formal plan.

Haslam said Monday and in his letter that his administration still does not have one.

“This is just about us being really clear about where we are,” he said. “We think there’s a lot more flexibility under the law than what they’ve shown. That’s what we’re trying to figure out.”